Cyprus Property Forum for Buyers, Sellers & Investors

Dear Nigel, We have just terminated our management agreement with our developer who has administered the site since they built it. Upon the purchase of units on the site, each owner had to pay an interest bearing refundable deposit which was to be held in a common fund and returned in the event of sale or termination of the management agreement. My question is, if some owners of units are in arrears with their communal expenses, does the developer have the right to deduct all these arrears from the common fund (making them shared arrears) and then distribute what is left between all the owners.
Kind regards, Barry.

Dear Barry,

The fact that some owners are in arrears should not affect those who have fully paid their management fees. So IMO as a man on the Clapham omnibus, the developer should return the deposits of those who have paid.

However, I suggest that you read through the agreement you have with the developer to see what it says concerning the return of deposits.

Regards,

Dear Barry

We too, were with a management company which was a subsidary of our (Major), developer. When they terminated our Agreement, all those in credit had their deposits refunded from their final invoices and no charge was levied on the community as a whole.

Alan

Hi, I have just joined the forum and see that my problem is identical to Barrys'.

In our case I have claimed back the deposit, but the Management company has advised:

"In this case of termination of services, all owners who will have balances to settle will be asked to do so. If this is achieved then it will leave the total common fund deposited whole to be passed on to the Owners Committee (with a list of who has paid their individual common fund deposit). If it is not achieved then any outstanding balances will be deducted from the total common fund and a list will be supplied to the Owners Committee for this. From there on it will be the responsibility of the Owners Committee to see to collection of any unpaid balances".

Is the company able to do this legally? Why should owners who have paid up be penalized for those who are in arrears?

Hello nickn and welcome to the forum.

Have you or your Management Committee signed an agreement with the management company to this effect?

Regards,